Paying for Quality Health Care: States’ Roles
March 24, 2011 New Hampshire General
Court Concord NH Ellen Andrews, PhD Health Policy Consultant www.csgeast.org
Health care spending
Sources: National Health Accounts, CMS, accessed 3/20/11, Fiscal Survey of States, NASBO, Fall 2010
And it’s going to get worse
Sources: National Health Accounts, CMS
State spending
Sources: National Health Accounts, CMS
State spending
Sources: National Health Accounts, CMS
Quality Only 39% of American adults are confident
that they can get safe, effective care when needed
Americans get only 55% of recommended care on average
Half of Americans report poor coordination of care; especially among those who see more than one doctor
One in three Americans reports getting unnecessary care or duplicate tests.
Quality in the region
Sources: S. Jencks, et al, Rehospitalizations among Patients in the Medicare Fee-for-Service Program, New England J Med, 4/2/09, Preventable hospitalizations US $30 billion/yr – AHRQ, National CVE meeting, 7/09
Quality in the region
Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx
Quality in the region
Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx
Quality in the region
Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx
If it’s not broken, don’t fix itWell, it’s broken
Sources: National Health Accounts, CMS
Current incentives Pay the same for unequal quality services Consumers have no information and no
incentive to choose higher quality/higher efficiency service providers
Encourages overuse, misuse of services Higher spending not correlated with higher
quality Higher spending not correlated with better
patient satisfaction
Fee-for-service misaligned incentivesFee for service encourages:
More services Less coordination Incentives for duplication Few incentives for prevention Stifles innovation Only pays for selected services - not email, group
visits, phone calls No link to quality Incentives to increase high profit services/patients
and avoid low profit
Value-based purchasing Rewards better outcomes Payments based on quality and efficiency of
care Data driven Remove incentives for more services Flexibility for providers to customize care Reward patient satisfaction Remove fragmentation and conflicting
incentives Align provider, payer and consumer incentives
to reward quality, effectiveness and efficiency
Consumers support value-based purchasing 95% of Americans feel it is important to have
information about the quality of care provided by different doctors and hospitals
88% feel it is important that they have information about the costs of care to them before they actually get care
Federal VBP Strong feature in national reform
Innovation Center, waivers ACOs Comparative effectiveness research Medicare and Medicaid bundled payment pilots
Medicare 23 programs – P4P, pay for reporting, never events,
medical home, gain sharing, removing regulatory barriers, e-prescribing, data aggregation
Premiere Demonstration – hospital P4P Physician Group Demonstration Implementing differential payments based on
readmission rates
Why should states implement VBP? State employee groups usually one of largest
groups in state – 42 states self-insure Medicaid programs – covers one in five
Americans States regulate insurers, license providers, CON Trusted source for consumer education, data
collection, research Public health collaborations Innovators – medical home, HIT, coverage
programs Provider training – promote primary care,
emphasis on accountability, transparency Convener – can get people to the table, anti-
trust protections
Options: Transparency Data reporting Report cards – hospitals, health plans,
providers Coalitions with other payers, providers for
joint reporting All payer data aggregation State employee, Medicaid reporting Improve consumer access to information
Options: P4P Widespread, but mixed results Medicaid P4P in 28 states and growing Federal Medicaid limits on incentive payments
in risk-based systems Target health plans and/or providers Coordinate and join with other payers to make
payments salient to providers Outcomes vs. process and teaching to the
test/cookbooks Provider resistance, low Medicaid participation
rates
Options: Payment system overhaul Never events Market share – tier and steer Shared savings Episodes of care, bundled payments Global capitation Resistance Barriers
Supportive options Medical home Accountable care organizations EMRs, health information exchange Workforce development, esp primary care Evidence based medicine
Maine value-based purchasing State employee plan leadership in larger multi-payer
collaborative – Maine Health Management Coalition 2005 adopted strategy to encourage consumers to
make informed choices, incentives to access higher quality care, reward high quality providers
Hospital and physician tiering by quality, expanded program over the years
Messaging to members, web-based, became a trusted source of information
Engaged providers in development of standards, QI plans
First year diabetes disease management participants averaged $1300 less in health care costs
Transitioning from FFS to bundled payments
Lessons from others Collaborate first Go slowly Start small and with strongest partners Coordinate across payers -- standardize Fair and open process Everyone on same page, all have same understanding Be clear on goals, single-minded dedication Strong consumer education piece necessary Plan for transitions Don’t underestimate the power of disclosure and
transparency, often stronger motivator than $$$ Be brave The time is right for transforming delivery and payment
systems – the status quo is not sustainable
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